Social y de género:

2.3.1 Analyse the insurable interest

The extent of the interest of the insured, for all items for which insurance is required, must be established.

2.3.2 Price, excesses and loadings

The major difference between insurers is their underwriting practices commercial risks. This is evidenced by the rates they apply and terms and conditions they impose.

2.3.3 Comparison of cover

In commercial insurance the cover provided between insurers has minor differences, which should be identified by the representative. The main differences to be compared are in the prices offered by the insurer, the excesses or loadings applied and any specific warranties that may be imposed. It is in this area that the representative should be aware of the FAIS General Code of Conduct, Conflict of Interest regulations, as it becomes vitally important that a representative may not recommend an insurer for which the

premium charged is higher, where the cover is identical, for the sole reason that they would earn a greater commission.

Summary

For an insurance representative to properly propose insurance solutions to a client, it is required for the representative to consider all the options best suited to the client’s needs.

This can only be done through a thorough “needs analysis” and comparison of cover and quotations offered by the different insurers. Each quote should be considered in terms of the client’s insurance exposure and prioritisation of needs.

Self-Assessment Questions

1. Which one of the following is a general exception to a multi-peril policy?

a) War

b) Flood

c) Landslip

d) Earthquake

2. Which of the following is a general condition of a multi-peril policy?

a) First amount payable

b) Warranties

c) Premiums are paid

d) All material facts are disclosed by both parties

3. Which of the following is a general provision in the multi-peril policy?

a) Computer losses

b) Prevention of loss

c) Claims preparation costs

d) Lightning

4. How does one establish insurable interest? a) From the previous insurance policy b) Producing proof of ownership

c) Valuation certificates

d) By taking ownership of the maintenance of the asset

5. What should a representative consider in the comparison of quotes? a) The general provision in the cover offered

b) The general exceptions

c) The terminology used in the quote d) The price offered for cover

6. What should a representative check for in a quote comparison? a) That the description of the risk is correct

b) That the general terms and conditions offered are the same c) That loadings have not been applied

d) That the client gets the cheapest price

7. A benefit of the policy is:

a) That all claims will be paid

b) That the terms and conditions are unique

c) That the client is indemnified in the event of an insured loss d) That every possible risk is covered

8. When comparing a quote, a representative needs to keep records of: a) Proof of ownership certificates, banking details of the client and

registration of vehicle

b) The survey completed, the quotes compared and the analysis of the client’s needs

c) The client’s financials, an inventory of assets, and the client’s ID documents

d) Registration documents for the company, their VAT certificate and list of employees

Self-Assessment Answers

1. Which one of the following is a general exception to a multi-peril policy?

a) War

b) Flood

c) Landslip

d) Earthquake

2. Which of the following is a general condition of a multi-peril policy?

a) First amount payable

b) Warranties

c) Premiums are paid

d) All material facts are disclosed by both parties

3. Which of the following is a general provision in the multi-peril policy?

a) Computer losses

b) Prevention of loss

c) Claims preparation costs

d) Lightning

4. How does one establish insurable interest? a) From the previous insurance policy

b) Producing proof of ownership

c) Valuation certificates

d) By taking ownership of the maintenance of the asset

5. What should a representative consider in the comparison of quotes? a) The general provision in the cover offered

b) The general exceptions

c) The terminology used in the quote

d) The price offered for cover

6. What should a representative check for in a quote comparison?

a) That the description of the risk is correct

b) That the general terms and conditions offered are the same c) That loadings have not been applied

7. A benefit of the policy is:

a) That all claims will be paid

b) That the terms and conditions are unique

c) That the client is indemnified in the event of an insured loss

d) That every possible risk is covered

8. When comparing a quote, a representative needs to keep records of: a) Proof of ownership certificates, banking details of the client and

registration of vehicle

b) The survey completed, the quotes compared and the analysis of the client’s needs

c) The client’s financials, an inventory of assets, and the client’s ID documents

d) Registration documents for the company, their VAT certificate and list of employees

Chapter

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